After a sputtering start, the new Fiat 500 is catching on in the United States.

Hardly a day goes by that I don't see one of these tiny jelly beans rolling down the road - not just in San Francisco, where their parkability is a big attraction, but also in the suburbs.

Introduced in March 2011, the 500 is the first Fiat sold in America in almost 30 years, and California is its biggest market.

At roughly 140 inches, the two-door hatchback is smaller than most subcompacts, such as the Honda Fit (161.6 inches), but longer than the miniature Smart Fortwo (106 inches). It comes in a dizzying array of 14 exterior and three interior color choices.

Michael Jordan, executive editor of Edmunds.com, calls it "cheap and cheerful transportation. It's big enough for you and your dry cleaning and has a certain strong expressive style that makes you happy every time you walk up to it."

When I pointed one out to my twentysomething daughter, she said, "I think that's a whole new car company." It dawned on me that an entire generation has grown up since Fiat withdrew from the U.S. market in 1983.

Back then, the sexy Italian-made cars were known for rust and reliability problems, earning Fiat the acronym Fix it Again, Tony. Of course it was hardly the only brand with quality issues in the 1960s and 1970s; Ford was known as Fix or Repair Daily or Found on the Road Dead.

'Love it or hate it'

Since that time all cars have become much more dependable, but since Fiat wasn't selling in the United States, its old reputation remained.

"The Fiat has been a love-it-or-hate-it brand," says Dave Cutting, senior manager of North American forecasting with LMC Automotive.

Based in Turin, Italy, Fiat is one of Europe's oldest carmakers. It also owns the Alfa Romeo, Lancia, Maserati and Ferrari brands.

In 2009, it acquired a 20 percent interest in Chrysler when the U.S. automaker emerged from bankruptcy. Last summer, its stake increased to 58.5 percent when it acquired the equity interests that the U.S. and Canadian governments received when they bailed out Chrysler.

"Chrysler was looking for small cars with clean emissions. Chrysler had some interesting big cars, Fiat had small cars. It seemed like a marriage made in heaven," says Jordan.

The true progeny of the Chrysler-Fiat relationship is the reinvented Dodge Dart, which debuts this month. It will be assembled in Illinois on an Alfa Romeo platform and sold through Chrysler-Dodge-Jeep-Ram dealerships.

Sold at Fiat 'studios'

The company plans to keep the Fiat brand separate. The 500 is assembled in an old PT Cruiser plant in Mexico and sold through independent Fiat dealerships. Although most were previously Chrysler brand dealerships, they have been rebranded as Fiat "studios."

Pete Dondero, a sales manager at Fiat of Fremont, says most of his customers "are kind of oblivious" to the Chrysler-Fiat connection.

Fiat has been selling the 500 in Europe under the name Cinquecento since 2008, but had to make some modifications before bringing it to the U.S. market in March 2011. It added cup holders, an armrest, an automatic transmission and government-mandated safety features.

It got off to a promising start, but when sales dipped last fall, the first head of Fiat North America, Laura Soave, was replaced.

"Their ads are part of the problem - they have been all over the place," says Jessica Caldwell, a senior analyst with Edmunds.com. "They started with Jennifer Lopez," an odd choice for an Italian-European car. "Then it was Charlie Sheen" zipping around his mansion in a Fiat 500 Abarth (a turbocharged version launched in May) while under house arrest.

Sales revved up this year. The company sold at least 3,000 cars in February, March and April and 4,003 in May, compared with just 1,759 in May a year ago.

Timothy Kuniskis, the new head of Fiat in North America, gives marketing the credit. "We have had three back-to-back fantastic ads" that increased brand awareness among shoppers to 45 percent from 9 percent.

But he admits that Fiat badly misjudged its customer base. "A year ago we had a very well-defined demographic target," single urbanites in their 30s or 40s with no children, he says.

The actual customers are all over the map: about half are generation X and Y, the other half are Baby Boomers. Their incomes range from $50,000 to almost $200,000. "We sell to more men than women," he says, while in Europe 72 percent of customers are female.

The top-selling models are at the low and high ends, Kuniskis says. The base car, with a manual transmission, starts around $15,000. The "fastest-selling 500 is our most expensive model," a convertible soft top with Gucci trim that sells for about $27,500.

Something unique

The one thing customers have in common is that they are looking for something unique. Buyers get so inundated with questions about their new car that Fiat has created "hero cards" they can hand out that have pictures and information about it, Kuniskis says.

Fiat sales have been constrained by a relative lack of showrooms. There are just 161 nationwide, including five in the Bay Area in Berkeley, Burlingame, Concord, Fremont and San Jose.

The top five Fiat dealers nationwide are in Austin, Los Angeles, San Jose, Santa Monica and Van Nuys.

Kuniskis says California accounts for about 20 percent of Fiat sales, which far exceeds the percentage of Chrysler brands sold in the Golden State. He says San Francisco "will probably be our No. 1 market at some point."

He adds that Fiat could sell more if it had more of the best sellers. "We have so many variations, it's great for the customer, they can really customize it how they want. But it's difficult to stock. On certain trim levels we run low. We could have sold some more than 4,003 (in May) if we had more Guccis or Abarths."

The plethora of models also makes it hard to compare prices, but, according to Edmunds.com, the average price customers paid in April for all Fiat 500 versions combined was $19,922 excluding tax, title and license. That compares with $14,299 for the Smart Fortwo, $16,651 for the Scion iQ, $17,085 for the Chevrolet Sonic, $17,853 for the Honda Fit and $25,411 for Mini Cooper.

30 miles per gallon

As for gas mileage, I used Fueleconomy.gov to compare a 2012 Fiat 500 with an automatic transmission to similar cars. The Fiat gets 30 miles per gallon on city-highway combined, compared with 31 mpg for the Mini Cooper and Honda Fit, 32 for the Toyota Yaris, 36 for the Smart Fortwo and 37 for the Scion iQ. Actual mileage can vary.

As for how reliable these new Fiats are, the jury is still out.

J.D. Power this month will release its first initial-quality study on the Fiat 500, based on a survey of customers after 90 days of ownershi. It will be posted at www.jdpower.com.